Proper representation of companies: how to avoid costly mistakes
In this article, we focus on the two most common types of company in Belgium, namely the public limited company (naamloze vennootschap - NV) and the private limited company (besloten vennootschap - BV).
Why proper representation is not just a detail
Proper representation is not just a formality. It is essential for the company itself, for the individuals representing it, and for third parties entering into contracts with it.
For the company
A company that is not properly represented can suffer adverse consequences as a result. For instance, case law from the Council of State provides numerous examples of appeals brought by companies that felt they had been disadvantaged in public procurement procedures, which were declared inadmissible on the grounds of improper representation of the company, either when participating in the public procurement procedure, or when submitting the claim to the Council of State.
For the signatory
There are very real risks for the person who signs, too. Anyone who lacks the necessary authority or exceeds their authority risks being held personally liable if the company suffers a loss as a result, for example in the form of legal fees, the cost of rectifying the situation, or potential claims for damages brought by the company. Furthermore, in practice, an incorrect signature often leads to a breach of trust with the company, potentially resulting in the termination of the mandate or the employment relationship.
It is also impossible to rule out further circumstances that could result in the representative being held liable by injured third parties.
For customers, suppliers and other contractual parties
The other parties to the contract are also well advised not to rely solely on the signature at the bottom of a contract. After all, in the event of a lack of proper representation, the company with which the contract is concluded has not given any binding undertaking, and the company is, in principle, entitled to refuse to perform the contract. That can, of course, have serious consequences for the other party, such as cancelled orders, services provided but not paid for, or major deals that need to be renegotiated.
Proper representation is therefore not just a “corporate formality”, but an essential part of sound risk management and smooth deal execution.
How can a company be represented?
Public limited company (NV)
Since the introduction of the Companies and Associations Code, the articles of association may stipulate that a public limited company is governed by a single director. In that case, the situation is straightforward: the sole director can represent the company with a single signature.
If the public limited company has a collegial board of directors (monistic governance structure), the board of directors usually represents the company in all legal transactions. It is generally accepted that the signatures of a majority of the members of the board of directors are sufficient.
→ If the board of directors consists of five directors, the public limited company has been validly represented and has therefore made a binding undertaking if at least three directors sign the document or contract in question.
In addition, the articles of association may provide for alternative rules on representation, which may be either more flexible or more stringent. As a result, it is entirely possible that, in addition to the general power of representation held by the board of directors, the company may be validly represented by two directors acting jointly or by a single (managing) director. In such cases, we often refer to a multi-signature clause or a single-signature clause.
Both these situations have pros and cons. For example, a multi-signature clause enhances control and governance, but it can also cause operational delays. The single-signature clause increases speed and commercial agility, but it requires trust and clear internal agreements.
For many businesses, this therefore involves a balance between legal certainty and commercial effectiveness.
In addition, the public limited company may also operate by means of special powers of attorney. In this situation, the board of directors grants a specific person (e.g. an employee) the authority to carry out specific acts.
→ a CFO who is authorised to file tax returns;
→ an HR manager who is authorised to sign employment contracts;
→ an operations manager who is authorised to sign supplier contracts within a clearly defined framework.
The public limited company has made a legally binding undertaking when the special representative acts within the limits of the authority granted.
It is important for the power of attorney to be sufficiently specific. A general power of attorney under which one person effectively has unlimited authority to make all decisions and take all actions is not valid. The power of attorney must therefore cover specific legal acts.[1]
Private limited company (BV - Besloten Vennootschap)
When a private limited company has only one director, the situation is straightforward: the sole director can represent the company on their own.
If more than one director has been appointed, they do not, in principle, constitute a board, unless the articles of association expressly provide for a board of directors. In that case, the power of representation is, in principle, vested in each director acting individually.
→ A private limited company has three directors. There is no provision in the articles of association requiring joint signatures. A single director signs a supplier contract independently. Legally that is sufficient to bind the company.
If the shareholders or directors wish to avoid this, the articles of association must expressly provide otherwise, for example by stipulating that at least two directors must sign jointly. A multi-signature clause can therefore also be introduced in a private limited company. In that situation, a single signature is no longer enough.
In addition, the private limited company may stipulate in its articles of association that governance is collective, with a board of directors. In principle, that company is then represented by a majority of the directors, unless the articles of association provide otherwise.
Once again, the articles of association may additionally stipulate that the company is represented in all legal transactions by two directors acting jointly, or by a single director.
Finally, special powers of attorney granted by the board of directors may also be used in a private limited company (as explained under the section on public limited companies).
Executive committee and managing director
In addition to the statutory representation arrangements and special powers of attorney, both public limited companies and private limited companies may also create an executive committee. This is responsible for actions and decisions that do not go beyond the day-to-day needs of the company or that, owing to their minor nature or urgency, do not warrant intervention by the governing body.
The day-to-day management may be entrusted to one or more persons, who may or may not be directors. A managing director or a person responsible for day-to-day management (sometimes also referred to as a ‘general manager’) may legally represent the company within the scope of this day-to-day management.
However, for acts beyond the scope of day-to-day management of the company, sufficient power of representation is still required under the articles of association, the relevant legislation or a special power of attorney. Third parties should therefore not automatically assume that someone holding the title of “managing director” has unlimited authority to represent the company.
Please note: not all restrictions can be enforced against third parties in the same way
In both public limited companies and private limited companies, the articles of association may impose restrictions on the power of representation, for example in relation to certain types of transactions or up to certain amounts. For example, there may be a provision stating that a single director is only authorised to act alone for procurement transactions, or only for transactions limited to EUR 100,000.00.
It is important to distinguish between statutory restrictions on the rules governing representation on the one hand, and restrictions contained in a special power of attorney on the other.
Restrictions arising from a single-signature or multi-signature clause are, in principle, not enforceable against third parties, even if they have been published. In practical terms, this means that the company may, in principle, still be legally bound vis-à-vis a third party, even if the internal rules on representation have not been correctly followed.
→ The articles of association stipulate that a single director is only allowed to sign individually for amounts up to EUR 100,000.00. That director signs a contract alone with a supplier with a value of EUR 180,000.00. In principle, the company may still be bound by its obligations towards that supplier, even if the director has acted improperly internally.
In this case, the penalty is internal: the director may potentially be held liable or may be removed from office.
The situation with special powers of attorney is different. The terms of a special power of attorney are enforceable against third parties. If the special representative acts beyond the scope of the authority granted to them, the company may, in principle, use this as grounds against third parties.
Where can the relevant information be accessed?
The company that is being represented can, of course, access all the information needed to determine who is authorised to represent it, since this is set out in its articles of association and its internal corporate decision-making processes.
For third parties, the Annexes to the Belgian Official Gazette are the main public source.
Every company has to publish an extract from its memorandum of incorporation here, including information on who governs the company and who is authorised to make binding undertakings on its behalf, the scope of this authority, and whether this authority has to be exercised individually, jointly or as a board.
Changes to these representation rules, appointments to the board and dismissals or resignations from the board must, in principle, also be published in the Annexes to the Belgian Official Gazette.
For third parties, the Annexes to the Belgian Official Gazette are therefore often the first and most important point of reference to check:
- how many signatures are required to give undertakings that are binding on the company; and
- who is authorised to sign the documents.
Special powers of attorney, on the other hand, do not need to be published. Nevertheless, in practice we often recommend that special powers of attorney should be published, as this enhances transparency and can help to avoid disputes over powers of representation. If these have not been disclosed, it is best to request a signed copy of the power of attorney.
How we support businesses in this area
At Grant Thornton, we support entrepreneurs and directors every day in arranging their powers of representation in a clear, practical and “deal‑proof” manner.
This includes:
- redrafting the articles of association;
- developing a comprehensive system of authorisations;
- creating a structure for day-to-day management; or
- correctly drafting special powers of attorney.
Our legal team will be pleased to assist you in a way that takes your commercial circumstances fully into account.
Because good governance does not have to hamper entrepreneurship. As long as a well-thought-out system is in place, proper representation can support faster decision-making, reduce the number of disputes and improve certainty at the negotiating table.
Would you like more clarification or personalised advice? Would you like to understand the difference between internal decision-making authority and external representation authority? On 28 April 2026, we will be hosting a free -dutch - webinar on this topic, during which we will explore practical scenarios, common mistakes and specific solutions in greater detail.
[1] We will not go into further detail here regarding the dual governance model, but the same principle applies: the provisions on representation in the articles of association must be carefullyaligned with the desired division of powers.